Surprise, surprise.
The 13th annual edition of Demographia’s International Housing Affordability Survey has deemed Hong Kong’s real estate the least affordable in the world. Again. For the seventh year in a row.
Considering that having a toilet so small you can’t sit on it and close your loo door is apparently okay now, and a HKD5,000 massage bed is “the best deal in Hong Kong”, we’re not massively shocked, but we are disappointed.
Demographia’s survey ranks markets by their “median multiple”, a figure obtained by dividing the median house price by the median annual household income (pre-tax). You’ll be horrified to know that Hong Kong’s median multiple is head and shoulders above the rest, at a whopping 18.1. That means the price of an average house (or to be more realistic, flat) in Hong Kong is 18.1 times more than the average annual income.
Coming in second at a still supremely unaffordable 12.2 is Sydney, followed by Vancouver at 11.8, Auckland at an even 10, and San Jose at 9.6.
Hong Kong’s medium multiple for 2016 is marginally less than 2015 (when we got a sharp-inhale-inducing 19), but that’s about as comforting as an aircon dripping dirty water on you, right after you got pooped on by a pigeon. That is to say, not very.
According to Demographia’s handy chart, any housing market with a median multiple under 3 is considered “affordable”, while 3.1 to 4.0 is “moderately unaffordable”, 4.1 to 5.0 is “seriously unaffordable”, and anything above 5.1 is “severely unaffordable”. Interestingly, we never knew it was possible to quantify sorrow until this very moment.
After flats in Aberdeen reached a record-breaking price of HKD16,497 per square foot in November, Chief Executive CY Leung announced that stamp duty (the tax paid on property purchases) would be raised to a standard 15 percent.
Previously, buyers only had to pay between 4.25 percent to 8.5 percent stamp duty, depending on whether they were permanent residents or if they already owned residential properties.
Despite this, Denis Ma, the head of research at real estate firm JLL, told SCMP that housing prices are “still expected” to increase by the end of the year.
And people wonder why millennials aren’t buying homes (or diamonds).
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